Schenectady County

Rotterdam, GE set to end dispute

General Electric and the town of Rotterdam are poised to ratify a deal that will resolve five years

General Electric and the town of Rotterdam are poised to ratify a deal that will resolve five years of litigation over the company’s property assessment and establish a fixed schedule of tax payments for the next decade.

Officials from the town, county and Schalmont Central School District declined to discuss the impending agreement in advance of their respective meetings scheduled for today. Rotterdam town Supervisor Harry Buffardi said the agreement is aimed at improving relations between the global corporation and the various taxing entities in the town that have been feuding over the company’s property value since the 1990s.

“Certainly, it’s intended to improve relations with our largest employer and our largest taxpayer,” he said Tuesday.

Meetings today

• The Rotterdam Town Board will meet in Town Hall at 4 p.m. to discuss the tax assessment agreement with General Electric.

• Schalmont’s Board of Education will meet for the same purpose in the district offices at 5:45 p.m.

• The Schenectady County Legislature is expected to take up the matter in its chambers at 7 p.m.

The agreement will likely reduce General Electric’s property assessment, currently $138.5 million, and mean the various entities will need to refund some of the money that was collected in taxes over the years. It was unclear how much each taxing entity will need to repay or how their budgets will be impacted by the payments.

Buffardi said the 10-year payment-in-lieu-of-taxes agreement arranged through the Schenectady County Industrial Development Agency will mean these entities won’t have to budget for costly litigation through 2023. He estimated the protracted legal fight with General Electric cost upward of $400,000 over the course of five years.

“This has been a prolonged Hatfield-and-McCoy-type fight,” he said “This has been a feud between us.”

Schalmont Superintendent Valerie Kelsey wouldn’t discuss the details of the settlement with General Electric or how much the district might need to refund the company for taxes paid, but she said the agreement will ultimately benefit the district.

“It’s a good thing for Schalmont in the long run,” she said. “We’ve strived to find a settlement to this situation.”

County Attorney Chris Gardner did not return calls seeking comment for this story.

Chris Horne, a spokeswoman for General Electric, declined to discuss the deal until the meetings today.

“GE is following the rules and protocols for this type of process and we are not in a position to provide details in advance of the town, school and county’s public meetings,” she said Tuesday via email. “We anticipate very positive meetings tomorrow that will exemplify the strong commitment shown by all parties to work together and arrive at a mutually satisfactory agreement.”

At least one Town Board member wasn’t pleased with the lack of details being made public. Robert Godlewski said he wasn’t apprised of the details Tuesday and learned of today’s special Town Board meeting only when a Rotterdam police officer hand-delivered a notice to his home Monday.

“As far as I’m concerned, we shouldn’t be acting on this,” he said.

Rotterdam and General Electric have legally sparred over the assessed value of the company’s 322 acres along Interstate 890 since 1983. The swath of land includes the company’s 1-million-square-foot-plus steam turbine plant known as Building 273, which was toured by President Barack Obama in 2011.

The legal battle between Rotterdam and General Electric seemed to peak when the town assessor valued the property at $275 million in 2000. Two years later, a state Supreme Court judge reduced the assessment to $122 million, leaving the town, school district and county on the hook to pay back roughly $15.7 million in tax overpayments made over a 10-year period.

Schalmont took out a 20-year loan to repay $6.15 million of the tax refund not covered by reserve funds, and $1.55 million was waived by GE as a “gift” to the district. Rotterdam was forced to borrow $1.1 million to pay off the remainder of the $2.4 million the town owed in overpayments, while the county bonded $5.2 million to repay its portion.

Then-town Supervisor John Paolino pledged to improve relations with General Electric when he took office in 2002, and the company even credited him with improving relations when he ran for re-election in 2003. But the company continued to fight its assessment even while Paolino, now a special consultant to the town, remained in office.

In 2007, a state Supreme Court judge set the 2003 property value at $126.4 million and the 2004 value at $129 million. Justices with the Appellate Division of state Supreme Court affirmed those values the following year.

But the battles over assessment continued when the town upped the value of the property to $138.5 million in 2008. General Electric contested this assessment and all subsequent ones, claiming its property and buildings were worth only $14.5 million.

Town Board members approved a $37,500 appraisal of the company’s property in April. At the same time, they approved an $80,000 expenditure to prepare an updated engineering evaluation of facility.

Buffardi, who made a campaign promise last fall to resolve the battle with General Electric, said the rancor from the legal troubles has prevented the company from developing its vacant land in Rotterdam. He said the largely self-contained company doesn’t rely on town services, yet pays hundreds of thousands of dollars in taxes.

“We are basically charging them for the air they are breathing,” he said.

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